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November 2015

Japan's economy contracted 0.8% on an annualized basis in the 3rd quarter, This was the second consecutive quarterly decline. Consumer spending remained soft. Businesses reduced investment during the quarter.

PCB and IC substrate maker Unimicron Technology will spin off its rigid-flex PCB businesses into a wholly-owned separate company effective on December 1, 2015.  The spin-off will not affect the parent company's net worth and earnings, it said in a company filing with the Taiwan Stock Exchange (TSE). The company also disclosed it is participating in the formation of a joint investment business initiated by Siliconware Precision Industries (SPIL). In a separate company filing with the TSE, Unimicron said it has subscribed to 20 million shares of the new entity for a total of $30.5 million. SPIL previously announced it has reached an agreement with three other Taiwan-based chipmakers including United Microelectronics (UMC), King Yuan Electronics Company (KYEC) and Sigurd Microelectronics to form a joint investment entity which will be engaged in making investments in semiconductor companies listed on the TSE. (Source: DIGITIMES, Taiwan)

Never ending

Even as thousands of visitors attend Productronica in Munich, we have initiated final preparations to attend the HKPCA-APEX event in Shenzhen China, and begun preliminary activities for the CPCA event (collocated with Productronica and SEMICON Shanghai) in March. Now we have just received a reminder that NEPCON Japan 2016 (January 13-15) will have 2,230 exhibitors.The 45th presentation of this event has "bundled" 6 shows together including: 45th INTERNEPCON JAPAN, 33rd ELECTROTEST JAPAN,17th IC PACKAGING TECHNOLOGY EXPO,17th ELECTRONIC COMPONENTS & MATERIALS EXPO, 17th PRINTED WIRING BOARDS EXPO, and 6th FINE PROCESS TECHNOLOGY EXPO. Colleagues that attended last year's collection in Tokyo related that it was impossible to adequately cover the show unless one had a team with specific assignments.

We wonder if any companies wish to assign coverage of  any of the leading shows or portions thereof to an outside consultancy.

Counter to the general trend of board makers

Taiwan's Compeq Manufacturing reported consolidated revenues of $154.7 million for October 2015 which provided it with a gain of 46.5% on year. The company has now achieved record high months 4 times in a row.


Our associates from around the world have landed in Munich to attend Productronica. We look forward to learning about what new technology and approaches they will find. Mutracx's new owners will display their inkjet system that has received so much publicity in its initial production trials at Whelen Engineering. Rainbow will debut its new "singulation" system that allows its photo resist technology to be used with current direct digital imaging processes. AIismalibar will show FASTHERM their newest high technology insulated metal substrate designed to achieve a faster thermal transition from the LED thermal pad to the heat sink. Electrolube will introduce a new 2-component hydrophobic conformal coating with excellent salt spray and chemical resistance with a range of thermal resistance of -40 - +100°C. Vi TECHNOLOGY will debut its new 3D AOI system. The K Series 3D will also be made available as a cost-effective 3D AOI upgrade to existing 5K, 7K, and 9K systems.

In all, 1,188 companies will exhibit at the show.

The start of a new era?

Historic Singapore handshake Saturday November 7, 2015 by President Xi (right) and President Ma could be the start of new levels of closer ties  and non-political (commercial and cultural)cooperation between the two sides.

It's not just electronic manufacturing, aluminum is next!

For 127 years Alcoa aluminum used in everything from beverage cans to airplanes, once making it a symbol of U.S. industrial might. Now, with prices near six-year lows, it’s closing 30% of domestic operating capacity. Harbor Intelligence estimates that if prices don’t recover, almost all U.S. Al smelting plants will close by next year. For more than a decade, output has been moving to where it’s cheaper to produce: Russia, the Middle East and China. A global glut has driven prices down by 27% in the past year, making American operations unprofitable and accelerating the pace of the industry’s demise. Aluminum is down 19 percent this year. The metal touched $1,460 last week and most American smelters can’t make money when prices are near $1,500. While output has been moving abroad for some time, the game changer in the past year has been the domination of China, where ballooning output has compounded a global surplus and driven prices so low that Bank of America estimates more than 50 percent of producers globally lose money. China probably will account for 55% of global aluminum production this year, up from 24% in 2005.(source Bloomberg News)

There were 380 participants (up 5% from 2014) occupying 1,400 booths at the TPCA show held in Taipei October 21-23. There were 3 new additional theme areas added to the show in response to the market trends: "Flexible and Printed Electronics", "Smart Automation" and "Taiwan International Surface Treatment Showcase."

Taiwan's Vice President Wu (8th from the left) opened the show with a welcome speech. (Photo courtesy of TKK)

Taiwan Kong King (TKK) signed an agency agreement on the 2nd day of the show with Philoptics Co., Ltd. , a Korean supplier exposure systems, automatic cut sheet laminators for dry film resist, and laser cutting systems for glass sheets.

Traffic at the show was moderate as reports for PCB and SMT equipment sales and materials was reported to be slow - except for suppliers to Apple (Foxconn Technology).

Business outlook for bare board fabricators remains poor from greater China to Germany.

Is bundling the next step to stem shrinking margins and increase profits?

A continued slow-down of motherboard demand in China next year will continue to squeeze margins and drive smaller brands such as Jetway, Jwele, M-One, and Topstar out of the market according to Taiwan's Digitimes. Meanwhile, several leading producers will seek to increase profits by taking advantage of the AMD-ATI merger to bundle its CPUs with less expensive ATI chipsets to compete with Intel in the OEM PC segment.

October 2015

Smart phone makers such as HTC, Xiaomi Technology, and Asustek Computer are demanding that its component makers (including PWB suppliers) lower costs for parts that go into slim margin products.

China's government has just approved a new 5-year plan as its central bank cut both interest rates and the reserve-requirement ratio for banks, in a bid to revive slowing economic growth. Does your company have a 5-year plan? Do the key members of your supply chain have one? Is it shared with you? Does you belong to a trade association that has one which includes your company's interests? Does your company participate in events that makes your needs known to your elected representatives? If not, you are allowing others to shape your future - or lack thereof.

Will we see the former c-level executives of Platform (MacDermid), Isola, OM Group, IBM Microelectronics, Alent, et al re-emerge? If so, a few will probably appear as Members of the Board or senior executives in operations seeking to grow in rapidly changing, difficult competitive global environments where new niches are cropping up. Others will migrate to the boards of smaller companies seeking to add a "big resume" to their boards. Few will go quietly and fade into the sunset.

From the EIPC

A new material developed at UNSW that can store digital information and be printed onto various surfaces, could be used for memory cells in next-generation, large-scale printable electronics. The material, made from the rare earth mineral cerium oxide, is comprised of tiny cubes that are roughly 10 nanometers thick, or about 10,000 times smaller than the thickness of a sheet of paper. When placed in a solution and deposited onto a conductive surface via ink-jet printer, the cubes self-assemble: first they form a coordinated square array, then they stack on top of each other like Lego, building up layer by layer. This is a next-generation memory technology that requires less voltage, consumes less power and can write/erase information faster than conventional memory devices. It is a memory ink that could revolutionize data storage in printed electronics.

As the worm turns

Hard on the heels of news that a Chinese company is buying Western Digital and loosening its restrictions on Western's merging activities with a newly acquired Hitachi operation, we learn that Western Digital is buying SanDisk. I guess that means that China will soon own both industry leaders and have a firm grip on a major segment of the world's memory business! My friend's granddaughter in Arizona is now learning Mandarin in elementary school. I think that is a good thing.

Reshoring/repatriation of PCB fabrication from Asia to......Europe?

They say that imitation is the sincerest form of flattery. As keynote speaker at the UK's Institute of Circuit Technology Hayling Island Seminar last month Spirit Circuits MD Steve Driver gave a keynote speech on the Reindustrialization of Europe using his LED substrate business as an example. He said that his customers "wanted them cheap and quick." He had been successfully using Chinese suppliers for years, but costs, especially freight, were an increasingly large part of his landed costs so he decided to source closer to home, but in a lower cost area than the UK. His search for a site wound up selecting Romania for a variety of reasons beyond just lower labor costs. 

He plans to have Europe's first fully digital PCB factory (highly automated) operating there in 2017 - noting that "the Americans got there first," referencing Whelen Engineering's recent accomplishment in New Hampshire. Driver predicted a resurgence of captive shop PCB manufacturing due to this new, now proven, approach.

Trade associations are not immune to consolidation

SEMI announced that FlexTech Alliance has become the first SEMI Strategic (Association) Partner, a form of inter-industry cooperation. In this partnership, FlexTech will continue to pursue its mission of fostering the growth of the emerging flexible, hybrid and printed electronics industry as part of SEMI, the global industry association advancing the interests of the worldwide electronics supply chain.

Who will be second?

SEMI is strengthening its position in the flexible, hybrid and printed electronics sector by more directly engaging with a new set of companies and R&D organizations, and leveraging an experienced team dedicated to this emerging industry. FlexTech’s activities of R&D programs, the annual Flex Conference, workshops and webinars in the flexible electronics market expect to gain improved reach through SEMI’s global platforms.

China's Unisplendor agreed to pay $3.8 billion - a 30% premium - for 15% of hard drive maker Western Digital. Uniplendor is a subsidiary of Tsinghua Holdings which is controlled by the Chinese government.  This past May the company bought a 51% stake in Hewlett-Packard's Chinese server company H3C Technologies for $2.3 billion. The U.S. Committee on Foreign Investment has not yet approved the Western Digital deal. Note that Tsinghua had a failed bid on Micron Technology earlier this year.

September 2015

Did you know that fewer than 20% of the independent printed circuit fabricators in the U.S. are members of the IPC? Did you know that the IPC now has more "foreign" members than domestic ones? 

One has to wonder what value those off-shore interconnect firms see that the American board fabricators do not see. Is it because OEMs and EMS enterprises now view the PCB as a commodity? Is it because the IPC is not perceived as offering board builders much more than standards - or as much as the HKPCA and TPCA offer their PCB fabricating members? Is it because no independent fabricators are on the IPC board of directors to represent their needs? Is geography the issue? Is it the rapid change of technology? Is it because the cost of keeping processes and the factory floor up-to-date is too excessive?  Is it the squeeze on bare board margins? Is it because contract manufacturers (and OEMs) just view the bare board as a component that amounts to only 5% to 7% of the final assembly? Is it due to industry consolidation? Are regulatory burdens part of the problem?

What do you think? Is there a solution? Should there be a solution? What do YOU recommend? Write and tell us! Let your voice be heard!

Not even heavy downpours could not keep the crowds from the opening of the Design2Part show in Marlborough, Massachusetts on September 30. This year's event contained a number of EMS companies as well as both of the two prevalent 3D printer technologies (equipment sales as well as manufacturing services).  More than 10,000 3D printers were said to now be in place in industrial operations in North America.

A number of the contract manufacturers (mostly small and medium sized) were Mil Spec and medical supplier approved. These had learned to place the "super small" chips (e.g., chip resistors down to 0.024"L x 0.012" wide)that we are encountering more frequently.

The 3D folks are still focused on prototypes and short runs as the construct time is still very long per part (some were 10 or more hours). The process that melts plastic wire to build parts is still primarily restricted to thermoplastic resins (e.g., nylon, polycarbonate, etc.). The system that uses a laser to melt the material for part build-up can also process some metals (powdered) as well as thermoplastic resins.

Initial reports state that the SMTAI in Rosemont, Illinois event opened with good attendance. A lot of machinery was on the exhibit floor. The IPC (and other) meeting rooms were full. And, most notably, the retirement party for JoAnn Stromberg (who has guided the SMTA since its inception) was packed!

As I predicted

TTM Technologies will close three manufacturing plants and lay off 550 workers as part of a global integration plan following its June $927 million acquisition of Viasystems in June. The Juarex, Mexico plant will be closed, two facilities in Silicon Valley will be consolidated into a single operation, and a Cleveland facility will be merged into one in North Jackson, Ohio.

Taiwan's Chin-Poon Industrial announced that its August consolidated revenues increased 18.5% from a year earlier to $60.7 million. More than 70% of its sales come from the auto industry.

It is noteworthy that China's President Xi Jinping stopped in Seattle to meet with American business leaders and 5 state governors BEFORE going on to meet with President Obama in Washington, D. C.  On the first day of the visit, after announcing ing a new deal to work on clean energy, TerraPower, an energy company founded by Bill Gates, entered into an agreement with China National Nuclear Corporation to work together on next-generation technology for nuclear power plants.
China invested a record $83 billion in renewable energy last year, according to the Frankfurt School's Center for Climate and Sustainable Energy Finance in Germany.

Intel Capital announced from Beijing that it is investing $67 million in eight Chinese startups. It is the latest investment pledge from a U.S. technical company showing support for China’s domestic technical industry ahead of Chinese President Xi Jinping’s first state visit to the U.S. It follows Dell’s pledge to spend $125 billion there over the next 5 years.
Intel’s new China investments include Ninebot Inc., the Xiaomi backed scooter startup that acquired Segway in April, chip design firm Telink Semiconductor, and electronics makers Bluebank Communication Technology and Shenzhen Hampoo Science & Technology.

India’s premier Narendra Modi met with top Silicon Valley executives a few days after Chinese President Xi’s visit to Seattle. Modi spent several hours on Saturday talking to U.S. technology heavyweights that he believes can connect with *India’s technology start-up environment. Several of the leaders Modi met (e.g., Microsoft’s Satya Nadella, Google’s Sundar Pichai, and Adobe’s Shantanu Narayen) were born in India. Modi’s goal is to motivate India’s large and successful ex-patriots population to contribute to their home country’s development. Others on his schedule this trip included John Chambers of CiscoTim Cook of Apple, and Paul Jacobs of Qualcomm.

NOTE*The  Indian Space Research Organization just had a successful launch of the country's Multi Wavelength Space Observatory, ASTROSTAT.

More than 1,900 PCB designers, fabricators, and assemblers attended PCB West 2015 in Santa Clara. More than 100 companies exhibited their wares on the sold out show floor, while more than 30 designers underwent IPC certification during the UP Media Group sponsored event.

MIT has joined the $171 million consortium on manufacturing flexible electronics. It is one of several universities in Massachusetts that will support a new federal initiative to boost manufacturing innovation in the area of flexible hybrid electronics (FHEs). It will work closely with the University of Massachusetts at Amherst, the leader of the Massachusetts node of the collaboration, to support the Department of Defense funded Manufacturing Innovation Institute for Flexible Hybrid Electronics. The effort will be managed by FlexTech Alliance, a non-profit research and development group based in San Jose, California. The funding is composed of $75 million in federal grants and $96 million in private contributions. Boeing and General Motors are amongst the members of the consortium.

Ye Gads! Will it really be possible for most assembly houses to comply with the new EU Court of Justice ruling  on Article 33 of Regulation No 1907/2006, as amended about the calculation of levels of substances of very high concern (SVHCs) in articles under the Registration, Evaluation and Authorization of Chemicals (REACH) regulation?

The ruling says that producers must calculate the levels of SVHCs (substances of very high concern) in their products at the level of the "simple" article, rather than at the aggregate level of the "complex" article that is currently being used.

This means that manufacturers must understand and report the presence of candidate list SVHCs (the current count is 163) at a much lower level in their products than they generally currently do. This will require far more work, effort, and cost. So rather than disclosing only if the level of an SVHC is above 0.1% by weight of your entire product, you must disclose its presence for each wire, cable, plastic casing, etc. that contains it above 0.1% by weight.

First bare boards, then SMT, and now....

This month SEMI will lead a delegation of international microelectronics industry executives to Hanoi to explore growing opportunities in Vietnam's emerging electronics industry. The Ministries of Science and Technology and of Information and Communications as well as representatives of high-tech park developments will discuss semiconductor manufacturing  investment and expansion plans as well as "incentives" with the visitors. Registration for the SEMI Vietnam Business Mission is now available through SEMI. It is noteworthy that due to rising costs a number of PCB companies have pulled up stakes in China and moved to Vietnam or selected Vietnam for future expansion.

Back in the day...

I remember that, decades ago, the IPC sponsored a trade mission to China. Led by Ray Pritchard, it included meetings with the local trade association, several factory visits, a trade show, and an optional added tour. It was attended by a number of fabrication executives of the smaller and medium sized "shops".  They apparently learned little, took no notable positive defensive or aggressive strategic actions upon their return. As a result, most of the attending companies (Printed Circuit Corporation, Beaver Brook Circuits, Circuitwise, Velie Circuits, - and others) no longer exist. The lessons to be learned were not!

The industry has changed since those "pioneering" days. The center of gravity has shifted. Consolidation within the entire supply chain has driven margins down severely. It is more difficult to introduce new products. It is even more difficult to gain traction once a product has been "proven". Yet opportunities abound in wearable electronics, automotive electronics, power generation, as well as storage and distribution. It will take a new outlook, strategy, and reset of goals to partake in the potential successes. It will take an open mind and innovative business approaches to thrive in the new world of manufacturing  electronic devices. The IPC Ambassadors Council has proposed a number of actions that could increase the successes of its members. STAY TUNED!

Dr. Jin Zhang, President of PhiChem Corporation* announced that PhiChem has been accepted as a member of Underwriters Laboratories (UL®) Standards Technical Panel (STP) for Printed Wiring Boards STP796, which covers standards UL746E and UL796. UL746E is the UL Standard for Polymeric Materials – Industrial Laminates, Filament Wound Tubing, Vulcanized Fiber, and Materials Used in Printed-Wiring Board, while UL796 is the Standard for Printed-Wiring Boards. An STP is made up of qualified member companies that have a common interest or stake in maintaining particular standards. These companies are entrusted to manage changes in these standards under the chairmanship of the UL.

*Gene Weiner is Chairman of PhiChem's Advisory Board.

Advanced Semiconductor Engineering announced the official inauguration of ASE Embedded Electronics Incorporated, a new joint venture (JV) with TDK Corporation. The new JV will manufacture IC embedded substrates using TDK’s SESUB® (Semiconductor Embedded in SUBstrate) technology. The venture’s new facility will be located in the Nantze Export Processing Zone, Kaohsiung City, Taiwan.  ASE’s System-in-Package (SiP) solutions plans to use the SESUB technology in a wide number of applications including PMIC, sensors, and RF tuners.